QUESTION 4 2 points Save Answer Calculate the value of a one year Zero Coupon bond that pays $1000 at maturity (a year from now), if the current one year rate is 0.45602, the default risk premium is 3.81522. (I'm giving you a 1% leeway - hint use excel (or a calculator)) QUESTION 5 2 points Save Answer Calculate the value of a one year Zero Coupon bond that pays $1000 at maturity (a year from now), if the current one year rate is 2.39413, the default risk premium is 2.76999. (I'm giving you a 1% leeway - hint use excel (or a calculator) QUESTION 6 2 points Save Answer Calculate the value of a one year Zero Coupon bond that pays $1000 at maturity (a year from now), if the current one year rate is 1.5406, the default risk premium is 0.10197. (I'm giving you a 1% leeway - hint use excel (or a calculator))

Question (4) :

Input the following in the financial calculator:

FV = face value = $1000

PMT = coupon = $0 (because zero coupon bond)

N = time to maturity = 1

I/Y = yield to maturity = one year rate+risk premium = 0.45602%+3.81522% = 4.27124%

Then press "CPT", "PV", we get -

PV = Value of bond = $959.04

Answer: $959.04

(If asked without decimal = Enter = $959)

Question (5) :

Input the following in the financial calculator:

FV = face value = $1000

PMT = coupon = $0 (because zero coupon bond)

N = time to maturity = 1

I/Y = yield to maturity = one year rate+risk premium = 2.39413%+2.76999% = 5.16412%

Then press "CPT", "PV", we get -

PV = Value of bond = $950.89

Answer: $950.89

(If asked without decimal = Enter = $951)

Question (6) :

Input the following in the financial calculator:

FV = face value = $1000

PMT = coupon = $0 (because zero coupon bond)

N = time to maturity = 1

I/Y = yield to maturity = one year rate+risk premium = 1.5406%+0.10197% = 1.64257%

Then press "CPT", "PV", we get -

PV = Value of bond = $983.84

Answer: $983.84

(If asked without decimal = Enter = $984)